ResMed reported a solid Q3 2025 with revenue of $1.2917 billion, up 7.9% year over year and 0.8% quarter over quarter, underscoring resilient demand for both hardware and software solutions in the company’s Sleep and Respiratory Care and Software as a Service (SaaS) segments. Gross margin held at a robust 59.3%, supported by a favorable product mix and cost discipline, while operating margin approached 33.0% as the company leveraged operating leverage and ongoing software monetization. Net income of $365.0 million translated to diluted EPS of $2.48-$2.49, reflecting disciplined expense management and a stable tax rate.
Cash flow generation remained the key driver of financial health. Operating cash flow reached $578.7 million and free cash flow was $554.9 million, resulting in a healthy cash balance of $932.7 million at period end. The company maintained a conservative balance sheet with total debt of $839.8 million and net debt of approximately -$92.9 million, signaling strong liquidity and ample capacity for capital allocation. Dividend activity totaled $77.7 million and share repurchases around $75.0 million, illustrating prudent capital deployment.
Strategically, ResMed continues to push software-led growth via Brightree, MatrixCare and related SaaS offerings, expanding recurring revenue and improving visibility across its global installed base. This software mix supports margin resilience and long-term revenue stability as hardware cycles may be lumpy. Management commentary (where available) emphasized ongoing demand for sleep apnea therapies and cloud-based patient management, with a focus on execution in international markets and accelerated software monetization. Key risks include the sizable goodwill/intangible asset base, potential reimbursement and regulatory headwinds, and currency and geopolitical risks inherent in a global business.